Market Matters Afternoon Report Thursday 28th July 2016

Afternoon Report 28/07/2016

Market Matters Afternoon Report Thursday 28th July 2016

Market Data

What Mattered Today

A reasonably firm session today – particularly for the miners and gold stocks while the energy coys came under some pressure after Oil prices fell overnight. BHP put on +0.55% to close at $19.97, RIO was up +2.10% to $50.64, Fortescue (FMG) was up another +4.46% to close at $4.62 & Newcrest (NCM) added +4.87% finishing at $24.74. In the mid-cap space, South 32 (S32) started to look okay adding +1.91% to $1.865.

A range of +/-26pts. 5538 low, 5564 high and a close at 5556; up +17pts or +0.31%. Interesting to look at the sector rotation today. Resources and Consumer Discretionary the top sectors – which implies risk on. Besides Energy which is oil price related, Utilities and Healthcare were the weakest links…which are risk off sectors. Money clearly flowing from expensive safety to cheaper risk/growth

Along those lines, there remains some opportunities about with Independence Group (IGO) coming back online after raising $280m in capital to pay down debt. They were down more than 8% early ($3.74 low) before rallying strongly to close at $3.95 – down just 3.19%. Clearly, appetite remains high for quality miners – particularly those in the mid-cap space – like IGO.

Independence Group (IGO) Daily Chart

Macquarie (MQG) held their AGM today, and the stock put on +1.36% to close at $74.80…. They reconfirmed FY17 guidance, broadly in line with FY16. We’ve talked about MQG a lot in recent notes, and we have it in the MM portfolio. The below slide is a good one and highlights the significant shift from transactional based earnings to annuity style income…Makes MQG’s earnings less volatile.

MQG on 12.2 times FY17 earnings still looks reasonably cheap.

Macquarie Group (MQG) Daily Chart

Henderson Group (HGG) reports tonight in the UK and was good to see strong buying ahead of it this afternoon. Good volume on the close with the stock up +5.21% to $4.04. The market is negative this stock so any ‘less bad’ number will be good and should see the stock higher….Consensus expectations tomorrow.

Henderson Group (HGG) Daily Chart

Sectors

Source; Bloomberg

ASX 200 Movers

Reporting this week

Origin (ORG) has June QTR production tomorrow & Resmed (RMD) reports full year earnings…

NPAT = net profit after tax (consensus numbers)
EPS = earnings per share (consensus numbers)
DPS = dividend per share (consensus numbers)

Select Economic Data; Stuff that really Matters in Green

What Matters Overseas

All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 28/07/2016. 5:00PM.

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